However, any relief would be temporary, permanent only until China renews the export of rare soil magnet, one of the officials said, quoting recent melting in relationships between the new Delhi and Beijing.
Policy improvements come in the middle of a offer that threatens production.
The Mint announced July 18 that the government has the task of the Association of Automobile Research in India (Arai) to assess whether the rules of localization within the PM e-drive and the motivational scheme (PLI) for cars and cars should be released after the industry.
“Arai returned to us and indicated that relaxation would be given to electric cars and buses. But not two rounds and three rounds,” said another official. Both officials spoke to Mint on the condition of anonymity.
Experts said that relaxation applies only to trucks and buses, because the components in these larger vehicles- batteries, traction engines, energy electronics, integrated chips and advanced PCB- are much heavier than those used in two and three rounds.
E -mail questions sent to the Ministry of heavy industry and Arai remained unanswered until the press time.
While the industry Mulling alternatives, there are challenges.
“Science for magnets of rare soils is what determines politics,” said Vivek Vikram Singh, CEO and CEO of the Group, Sona Comstar.
Singh pointed out that vehicles running on high -performance engines could not run on anything but on heavy magnets of rare soils. “Although it is possible to use alternatives such as bright rare soils for smaller vehicles, such as electric two -wheel and three wheels, perhaps even for a small car, these alternatives may not be the best case for electric buses and trucks,” he added.
Why trucks and buses?
The Ministry weighs Arai’s recommendations for weeks after extending the system by two years for these segments. The PM E-drive scheme will penetrate two and tricycles in March 2026, but the allocated funds for zero emissions and trucks will continue to be paid to March 2028.
About half of the scheme £10,900 Crore expenses are devoted to electric trucks and buses £4 391 crore earned for electric buses and £500 crore for clean trucks.
Within this system, the manufacturer must observe the conditions of the localization listed in the program production program, which states components eligible for imports to ensure that the ecosystem of the domestic car is developing, and in accordance with the vision of the self -confidence of the Narendry Modi government.
“The aim of these programs is very clear – supporting the private sector to produce components and technologies to the extent and develop domestic skills,” said Sharif Qamar, associated director of transport and city administration at the Energy and Resources Institute (Teri). “Therefore, it is important to reduce localization. However, this should be revised and rationalized due to the decreasing level of investment and production capacity.”
Qamar noted that relaxation is probably limited to trucks and buses due to differences in components used in vehicle types. “Parts and components used in larger -sized vehicles, such as trucks and buses, are very different in compared to two -wheel and three segments. Therefore, it is extremely difficult for OEM to occur, especially for objects such as batteries, traction engines, integrated chips and PCBS,” he said.
“Electric 2WS and 3W are now in production for a relatively long time, and therefore a large supplier chain of components has been tied in the Indian ecosystem,” he added.
Alternatives and industrial reactions
Localization relaxation comes as a tension between the new Delhi and Beijing ease. Chinese Foreign Minister Wang Yi recently visited India while Prime Minister Narendra Modi has visited China over the last month. Chinese officials said it would restore the export of rare soil magnet, critical of defense, electronics, cars and renewable energy, after an export check order in April.
Dependence on China could be deployed as a geo -economic tool in the future crisis with China, said Sankalp Gurjar, professor of geopolitics at the Gokhale Institute of Politics and Economics.
“The arrival of Donald Trump and his tariffs accelerated the melting process between India and China. Both countries tried to fix their relationship, as seen from Prime Minister Narendra Modi at the SCO summit,” he said.
However, supplies have not yet been built and requests of Indian companies are still waiting for approval.
Mint 5th August reported that automakers will explore alternatives such as the use of light rare country magnets importable from China or without rare countries. However, these solutions may not suit all segments of the vehicle.
Singh Sona Comstar said that while more domestic production was more advantageous in the long run, the immediate priority was the reopening of heavy reserves of rare soils from China and that it remained optimistic about the improvement of the situation.
Sona Comstar, listed on exchanges as Sona BLW Precision Forgings, is one of the largest Indian importers of rare soil magnets used in traction engines.
A scale of introduction EV
Every year about 3,000-4,000 electric buses are sold in the country. Only medium and heavy goods carriers (trucks) get incentives within PM e-drive. Approximately 200-300 such trucks were sold in the country in FY24 and FY25.
India imported approximately $ 200 million from the magnets of rare soils from China in FY25 from China in June this year, adding that most Indian cars had stocks of these magnets that would last until July.
“Although the business value may seem modest, the strategic dependence it reflects is nothing but. The uncertainty of the offer has thrown a shadow on production planning,” the note said.
The automaker was considering sending engines to China to install a magnet or import engines already equipped with rare soil magnets. Some have tried these alternatives along with the use of light magnets of rare soils or engines without rare soils. No data equipped with rare soil magnets imported before the introduction of the localization rules were available on traction engines.
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